Blockchain based exchange traded funds were launched by reality shares advisors and also by Amplify Trust ETF on NASDAQ as well as in messy.
The First Blockchain ETFs Have Launched on the Nasdaq Exchange
The reality shares ETF opened at $ 24.2 whereas Amplify’s ETF opened at $ 20.
The exchange-traded funds are designed only to invest in companies which are based in the blockchain industry. The prospect is for the exchange-traded funds were filed in November 2017. The prospect also stated that investing in such blockchain based companies might be a bit risky and it does not guarantee any profits.
The prospect has further stated that they would only invest in companies over a market capitalization of greater than $ 200 million. This should provide some relief to the prospective investors. In addition to that, the exchange-traded funds would only invest in companies which have a daily trading average of more than $ 1 million for the last 6 months.
Reality shares have even partnered with NASDAQ in order to create an index which would quantify blockchain start-ups. The company would use this index in order to invest in blockchain based companies. This was disclosed by an analyst working in reality shares by the name of Kian Salehizadeh. The index runs on the algorithm which is designed by reality shares.
The analyst further added that they wanted to create the exchange-traded fund which actually taps into the potential of the underlying technology of cryptocurrencies that is the blockchain technology rather than the actual cryptocurrencies. He also made it clear that initially, the name of the exchange-traded fund actually consisted of the word blockchain but it was the US Securities and Exchange Commission which asked them to remove the term blockchain.
The SEC has still not approved the exchange-traded funds but they have also not disapproved it either. This technically means that under the current rules and regulations, these exchange-traded funds can actually be launched. According to the rules of SEC, if there is no approval or disapproval within 75 days, the exchange-traded funds can list on the exchanges.
Even though in the past as well plenty of companies have tried to list the blockchain based exchange-traded fund but none of them have been successful. These 2 are the only companies which have successfully managed to list in the blockchain based exchange-traded fund. Also, recently another company by the name of Horizons ETFs management filed for exchange-traded fund based on the blockchain technology in November.